China’s largest bank is set to suspend new account openings for forex and commodities trading beginning next week, raising concerns over further tightening control of the country’s currency and product market.
In an Oct. 8 statement, the Industrial and Commercial Bank of China (ICBC) announced restrictions on certain types of retail businesses involving foreign exchange trading. Existing clients will be barred from opening new trading positions starting Nov. 14.
Such businesses allow retail investors to buy or sell foreign currencies for speculative or hedging purposes, but not withdraw or transfer the foreign currencies from the trading accounts.
State-owned ICBC will also stop taking in new clients in trading businesses involving energy, base metal, agricultural products, and precious metal indexes as of Oct. 17, according to the statement.
“Risk is high these days in global forex and commodities markets, so please pay attention to controlling risks,” the bank said.
The latest restrictions come as global energy prices surged due to global power shortages.
Bank of China and China Merchants Bank also closed foreign exchange trading businesses in recent months. Last year, the former’s clients may have suffered over $1 billion losses in a crude oil-linked product after a slide in oil prices.
This year, over 20 banks have restricted foreign exchange businesses and precious metals, reported Chinese finance news outlet East Money. Means include adjusting risk level, trading threshold, position limits, etc.
Reuters contributed to this report.